The UK risks “falling behind” on its ambitions to incorporate stablecoin technology into the economy amid rising competition from overseas, a leading industry body has warned.
Inaction in firmly legislating the cryptoasset sector has led to a “growing disconnect” between previous pledges by Chancellor Rachel Reeves to drive forward developments in blockchain technology and the “direction of travel in current regulatory proposals,” according to Riccardo Tordera, director of policy and government relations at the Payments Association.
“If the FCA continues down an overly restrictive path, the UK risks undermining its competitiveness and missing out on the substantial economic benefits that stablecoins can deliver.”
Tordera’s comments come following major develops in cryptoasset regulation in the US. The recently established GENIUS Act set firm rules regarding how businesses can use stablecoins, offering transparency and confidence to the industry.
Though there have been some developments in the UK, including plans to allow retail investors to purchase crypto-backed exchange traded notes (ETNs), the Payments Association has criticised the lack of a “clear trajectory” compared with the US.
“The UK has a generational opportunity of benefiting from the global stablecoin market, but only if regulation is enabling rather than restrictive. The US is already moving quickly[…]If the UK fails to recognise the implications of this international delta, we risk losing our competitive edge,” said Tordera.
“We urge the FCA to strike the right balance, protecting consumers without stifling innovation, and to work with industry to build a stablecoin regime that supports sustainable growth, technological leadership, and global influence.”
There has been growing discontent among the broader blockchain and crypto sector in the UK, which recently called out the chancellor over what they perceived as shortsighted plans to sell off the Treasury’s Bitcoin reserve – held following the seizure of the asset from various criminals.
Several figures in the industry have also complained to UKTN that to this day the traditional banking sector refuses to work with them.
Register for Free
Bookmark your favorite posts, get daily updates, and enjoy an ad-reduced experience.
Already have an account? Log in
